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Panels back energy bill to fund project slated for ’50

Amended date set to encourage discussion on Molokai measure

February 14, 2014
By MELISSA TANJI - Staff Writer (mtanji@mauinews.com) , The Maui News

State House and Senate committees passed a bill this week to fund a Molokai renewable energy project that proponents say could drive down electricity costs, but funding for the project wouldn't go in effect until July 1, 2050.

Senate Bill 2754 and House Bill 1942 would issue up to $50 million in special purpose revenue bonds for Princeton Energy Group, or a related "special purpose entity," to assist with the planning, design, construction, equipping, land leases and other tangible assets for a renewable energy project with energy storage technology on Molokai.

But on Tuesday the Senate Committee on Energy and Environment and the House Committee on Energy and Environmental Protection both amended the bill so the act would not take effect until 2050, "to encourage further discussion," according to both committee reports. The original bill would have taken effect July 1.

Project opponents testified that concrete plans need to be made public. The Senate Committee on Energy and Environment has requested that, by April 11, Princeton Energy would submit copies of its letters from the state Department of Budget and Finance and the state Department of Business, Economic Development and Tourism.

The letters need to show that the departments have reviewed Princeton's business plan, although the departments do not need to approve the plan, according to a committee report.

The bills were referred to the Senate Ways and Means and the House Finance committees.

According to testimony from Princeton, a Nevada limited liability company, the funding would benefit the Ikehu Molokai Project, a multimegawatt renewable energy project with energy storage technology near Kaunakakai to exclusively serve Molokai.

The project's first phase aims to get the island to 50 percent or more renewable energy penetration by using photovoltaic generation, "coupled with end-use energy efficiency measures," wrote Princeton Energy Group Chairman and Chief Executive Officer Steve Taber.

The storage equipment would be either batteries or pumped-storage hydroelectricity.

(A pumped-storage hydroelectric system uses low-cost power during off-peak electric use times to pump water to an elevated water storage reservoir. Then, when more energy is needed, the water is released and falls by gravity through turbines to produce electricity.)

The project's second phase has not yet been designed, but it would aim to get the island to 100 percent use of renewable power.

"The island of Molokai suffers from very high electric rates, a grid that is unstable electrically, and a large carbon footprint. The Ikehu Molokai project aims to solve these problems by converting the island's electric system to 100 percent renewable energy. This effort will require a mix of technologies and multiple phases, and it will be the work of several years," Taber said in his testimony.

Mat McNeff, renewable energy services manager at Maui Electric Co., said in an email Thursday that MECO has been contacted by Princeton Energy Group, but discussions have been very preliminary.

"We would support a project that is in the best interest of the Molokai community," McNeff said.

Testimony to both committees regarding the bill have been mixed. Proponents have asked for electric rate relief, while opponents say the idea of renewables is good but the community needs more project details.

Maui County Energy Commissioner Doug McLeod did not take a position, but he told the Senate committee Tuesday that Princeton's project is too preliminary to justify bond funding.

"The original proposal for solar PV (photovoltaic) plus pumped hydro seems to have changed radically, and the community has not had access to even basic engineering studies or estimates at this time," McLeod said. "Once it becomes clear what is being proposed, the Legislature and the community can determine whether to provide funding support via (special purpose revenue bonds.)"

Maui County Council Member Stacy Crivello of Molokai asked legislators to provide funding to other industrial enterprises.

Like McLeod, she pointed out the recent shift in the company's project plans.

"The Princeton Energy Group initially identified their big plans for renewable energy on Molokai based on a pumped hydro storage. Today, it is basing its plans on batteries or other considerations," Crivello wrote. "I commend our legislators' efforts to provide support to address resolutions to reduce Molokai's crippling high cost of energy to the residents and businesses of Molokai. However, the Princeton Group has a myriad unanswered technical issues."

She also questioned Princeton's motives for the project, noting that she had not seen evidence that Princeton is working with MECO regarding interconnectivity issues.

Molokai resident Kanoho-wailuku Helm, president of I Aloha Molokai, also opposed the bill.

He said Princeton had not or will not produce documentation of its plans to the community.

"To date, we have seen no solid plans of any type, no engineering reports, no elevations, no financial projections - nothing - just conversations," Helm wrote, noting that the group is not opposed to renewable energy projects. I Aloha Molokai has opposed big wind turbines on Molokai as well as an undersea cable to carry electricity from Maui to Oahu.

Molokai Ranch owns and operates three utility companies, and it supports the bill, said Molokai Properties Chief Executive Officer Clay Rumbaoa. (Molokai Properties does business as Molokai Ranch.)

The project will bring electric rate relief that Molokai Ranch can pass on as cost savings to its customers or possibly hire more employees, he said.

The Sierra Club of Hawaii submitted written testimony to legislators in support of the bill.

The club said that while the proposal still needs to be "vetted" and "approved" by the community and pertinent regulatory bodies, it believes it is worthwhile to leverage state support to ensure that test projects move forward.

A signed petition in support of the bill included signatures of 50 people, mostly with Molokai addresses. The petition said the project could reduce and stabilize Molokai's "extremely high" electricity rates.

Taber said Princeton has "analyzed the full range of renewable energy technologies to arrive at the most cost-effective project design."

Technologies analyzed included solar photovoltaics, dispatchable solar thermal energy, utility-scale wind turbines, small-scale wind turbines, direct combustion biomass and waste to energy, gasified biomass and pumped storage hydroelectric as well as others. The company had looked "briefly" at geothermal energy but rejected it because the geothermal resource on Molokai is poor, Taber said.

It has also looked at high-energy density batteries but rejected it because of the fire risk, he added.

Taber noted in his testimony that the company had planned a pumped storage hydroelectric resource to be located near Manila Camp in Kaunakakai, but due to concerns from residents, the company is investigating a quieter storage technology, flow batteries and a relocation of the equipment to an industrial park away from residential areas.

Taber said Princeton has held a dozen or so meetings with Molokai community groups and will have another round of meetings this month and in March.

* Melissa Tanji can be reached at mtanji@mauinews.com.

 
 
 

 

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